Fidelity estimates Reddit’s holdings are at $15.4 million, which is down over 7% from the fund’s estimates of $16.6 million from this past April.
I remember reading that reddit went on a hiring spree and they like multiplied their workforce during the pandemic. I heard some speculation that this API change was about that, because they now have to make ends meet somehow or at least convince the investors that they are doing something. They invested and expected further growth and the pandemic tech boom didn’t last forever. One miscalculation leads to another.
That’s… not how valuations work. They’re using the amounts of cash raised, instead of adjusting those by the number of shares sold.
This explains the spez iron boot. The business is in a lot of trouble and he’s concerned about his job and the jobs of everyone around him. Ironically, the iron boot is making the whole situation worse. Because spez isn’t very good at strategy. Often, bankers are appeased when a business takes bold decisions to cut things. But in this case, it has only revealed what a fragile business Reddit has, from a Wall Street perspective, anyway. Associating himself with Elon Musk is absolutely suicide after that fool got taken for billions in the Twitter sale and has only damaged it further since then. But like I said, not very strategic there Mr spez…
The reality is that unless you have immense, immense scale (i.e., Facebook, Instagram, YouTube, LinkedIn), making money off social media is impossible. Twitter barely made any money before Elon Musk took it over, and it’s making less now.
Reddit is pseudo-anonymous too and is harder to monetize, because high ad rates come from being able to identify your users.
For those who didn’t read the article, important note.
The valuation decrease was as of May 31.
It wasn’t even after the Reddit apocalypse! What is going to happen next?
I think that’s a fair take that’s likely to happen. It really depends now on what Reddit does to try to normalize things or blow things up more. I think if they try to just rebuild relationships with their new group of users, they may survive.
But they also seem equally as likely to find a new way to screw themselves over…
They still haven’t replaced >90% of the moderators… it will take months, probably longer to feel the full effects. People will test it, and will get creative. There is a decent chance if they aren’t actively working on a sophisticated plan for thay, the website turns into an alt-right cess pool with CP that slips through the cracks.
